Here's The Only Change In Facebook's Terms Of Service That Matters To Investors (FB)

Published 3:51 pm, Friday, November 23, 2012

That's been a move that Facebook investors have been looking forward to for some time.

To place ads on third-party websites, Facebook needs to implement changes to its terms of service, so it can use data about users' likes and other information they've shared on the social network outside Facebook proper.

Years ago, in response to some forgotten privacy kerfuffle, Facebook instituted a byzantine process where users could sort of have a vote on changes to its terms of service. Most of the coverage of Facebook's new terms of service have focused on the elimination of this voting process.

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In reality, it was highly unlikely that conditions would ever be met for the vote to be binding on Facebook, but the process was cumbersome and slowed down changes. Facebook CEO Mark Zuckerberg hates slowness—his motto is "move fast and break things."

Facebook has a huge share of Web traffic already, with 1 billion users a month. But placing ads on third-party websites, as Google does with its profitable AdSense program, could make Facebook a must-buy for marketers.

Anyway, that's the only part of this latest terms-of-service fuss that investors need to pay attention to—not whether Facebook is doing something that privacy activists find sinister.